CANADIAN TIRE CORPORATION, LIMITED ANNUAL INFORMATION FORM May 11, 2004 ANNUAL INFORMATION FORM CANADIAN TIRE CORPORATION, LIMITED TABLE OF CONTENTS 1. CORPORATE STRUCTURE............................................................................................................................ 1 1.1 NAME AND INCORPORATION............................................................................................................................. 1 1.2 INTERCORPORATE RELATIONSHIPS .................................................................................................................. 1 2. GENERAL DEVELOPMENT OF THE BUSINESS........................................................................................... 1 2.1 SUMMARY OF THE BUSINESS ........................................................................................................................... 1 2.2 THREE YEAR HISTORY .................................................................................................................................... 2 2.2.1 Strategic Plan....................................................................................................................................... 2 2.2.2 Store Improvement Program ............................................................................................................... 2 2.2.3 PartSource ........................................................................................................................................... 3 2.2.4 Automotive Infrastructure..................................................................................................................... 3 2.2.5 Other CTR Initiatives............................................................................................................................ 3 2.2.6 Mark’s Work Wearhouse Ltd................................................................................................................ 3 2.2.7 Distribution ........................................................................................................................................... 4 2.2.8 MasterCard .......................................................................................................................................... 4 2.2.9 Bank Licence ....................................................................................................................................... 4 2.2.10 Financing .............................................................................................................................................. 5 2.3 SIGNIFICANT ACQUISITIONS AND DISPOSITIONS ................................................................................................ 6 2.4 TRENDS.......................................................................................................................................................... 6 2.4.1 Store Improvement .............................................................................................................................. 6 2.4.2 Improving Technology.......................................................................................................................... 6 2.4.3 Credit Card Receivables Growth ......................................................................................................... 7 2.4.4 Petroleum............................................................................................................................................. 7 2.4.5 PartSource ........................................................................................................................................... 7 2.4.6 Mark’s Superbranding Strategy ........................................................................................................... 7 3. NARRATIVE DESCRIPTION OF THE BUSINESS .......................................................................................... 8 3.1 CANADIAN TIRE RETAIL ................................................................................................................................... 8 3.1.1 Marketing ............................................................................................................................................. 8 3.1.2 Supply Chain........................................................................................................................................ 9 3.1.3 Dealer Operations.............................................................................................................................. 10 3.1.4 Real Estate and Construction ............................................................................................................ 11 3.1.5 PartSource ......................................................................................................................................... 11 3.2 CANADIAN TIRE STORES AND ASSOCIATE DEALERS........................................................................................ 12 3.3 CANADIAN TIRE FINANCIAL SERVICES LIMITED AND CANADIAN TIRE BANK ....................................................... 13 3.4 PETROLEUM ................................................................................................................................................. 14 3.5 MARK’S WORK WEARHOUSE LTD. ................................................................................................................. 14 3.6 INFORMATION TECHNOLOGY.......................................................................................................................... 15 3.7 EMPLOYEES.................................................................................................................................................. 15 3.8 FIXED ASSETS AND CAPITAL EXPENDITURES .................................................................................................. 16 3.9 BUSINESS DEVELOPMENT INITIATIVES ............................................................................................................ 16 3.10 COMPETITIVE CONDITIONS ........................................................................................................................ 16 3.10.1 Canadian Tire Retail .......................................................................................................................... 16 3.10.2 Petroleum........................................................................................................................................... 17 3.10.3 Canadian Tire Financial Services Limited and Canadian Tire Bank ................................................. 17 3.10.4 Mark’s Work Wearhouse Ltd.............................................................................................................. 18 3.11 CUSTOMERS AND SUPPLIERS .................................................................................................................... 18 3.12 SEASONALITY OF CANADIAN TIRE RETAIL .................................................................................................. 18 3.13 ENVIRONMENTAL MATTERS ....................................................................................................................... 18 3.14 INTANGIBLE ASSETS ................................................................................................................................. 18 3.15 CONTRACT RE-NEGOTIATIONS AND TERMINATIONS .................................................................................... 19 3.16 FOREIGN OPERATIONS.............................................................................................................................. 19 3.16.1 Canadian Tire Retail .......................................................................................................................... 19 3.16.2 Canadian Tire Financial Services Limited and Canadian Tire Bank ................................................. 20 3.16.3 Mark’s Work Wearhouse Ltd.............................................................................................................. 20 4. SELECTED CONSOLIDATED FINANCIAL INFORMATION ......................................................................... 20 4.1 ANNUAL INFORMATION .................................................................................................................................. 20 4.2 FACTORS AFFECTING COMPARABILITY ........................................................................................................... 21 4.2.1 Year Ended January 3, 2004 Compared to Year Ended December 28, 2002 .................................. 21 4.2.2 Year Ended December 28, 2002 Compared to Year Ended December 29, 2001 ............................ 21 4.2.3 Year Ended December 29, 2001 Compared to Year Ended December 30, 2000 ............................ 22 4.3 DIVIDENDS.................................................................................................................................................... 22 5. MANAGEMENT’S DISCUSSION AND ANALYSIS ........................................................................................ 22 6. MARKET FOR SECURITIES.......................................................................................................................... 22 7. DIRECTORS AND OFFICERS....................................................................................................................... 23 8. ADDITIONAL INFORMATION .......................................................................................................................